By Emily Hansen
Are you in the market for a new set of wheels? Whether buying a new or used car, you’ll likely have to do something with your old car. Should you sell it yourself or trade it in to a dealer? Some people are adamant about avoiding a trade-in of their car. Others aren’t willing to expend the time and effort it may take to find a buyer.
There are pros and cons to both routes. We’ll guide you through them so you’ll have a better idea at the end about which option is right for you.
Reasons to Trade a Car
- You don’t want the hassle of selling your car. Yes, there are hassles. You will have to prep your car for sale by cleaning it inside and out. You’ll have to run an ad on Craigslist or other places that host private listings, field all inquiries, and meet with prospective buyers.
- You don’t want to give out your contact information or bear any risks of meeting with strangers, including letting them test drive your car.
- A car dealer may be more willing to take a less than perfect car than a private buyer.
- Trading in your car can help reduce or eliminate the money needed up front and lower your overall payment.
- The dealer is equipped and experienced at handling both buying and selling transactions. This includes paying off any loan you may have on the trade-in vehicle and completing all the sales paperwork needed by your state and local jurisdictions.
Best fit if you: Want a simple solution; are unable to wait for it to sell; are less worried about final sale price.
Reasons to Sell it Yourself
- Dealers generally will not give you as much in trade as a regular buyer will during a sale.
- Your car is collectible or rare — These types of vehicles usually sell quickly, at asking price, in the private market.
- You have plenty of time and enough financial liquidity to wait for a buyer who will give you top dollar for your car.
- You enjoy the process of selling your car and feel comfortable dealing with paperwork and people.
Best fit if you: Want to maximize the sale price; want to hand-pick the next owner; aren’t in a rush to sell.
Preparation is Key to a Successful Transaction
Follow this simple guideline to help make the sale of your car – to a dealer or individual – smooth and successful.
- Wash and vacuum your car a few days before putting it up for sale or bringing it to the dealership. First impressions do make a big difference with someone who is considering buying your car.
- Run a Carfax Vehicle History Report on your car. Providing it to prospective buyers up front helps build trust and shows you have nothing to hide. It can also alert you to any issues a dealer may find if you decide to trade-in. This is especially important if you are not the original owner of the car. Be sure to highlight selling points like it being a one-owner car or has no accidents reported to help enhance the value of your car.
- Do your research ahead of time to make sure you’re asking the right price. Use reference guides like Kelley Blue Book (KBB), the National Automobile Dealers Association’s (NADA) Guides, or Edmunds.com. When you check their websites or printed books, be sure to check both the trade-in and private party values. Also, know the approximate cost of any repairs your car may need. You don’t need to point out every single knock and ding. Let the dealer or individual know that you have done your research. Be prepared to counter their offer, but have some flexibility rather than sticking to a firm price.
- Bring along any maintenance records on your vehicle. This is evidence that you kept the car well-maintained. (By the way, the myCarfax app can make this easy and automatic.)
- Some dealers will appraise your car for free. For example, CarMax offers a free written appraisal after a full inspection and you have up to seven days to accept their offer. If you do decide to trade-in, consider taking your vehicle to a dealer who does not sell your make and model as a new car. Being the only Ford in a sea of Nissans can be to your advantage.
- For trade-ins, negotiate the trade separately from the new purchase. Reputable dealers want your business and are willing to work out fair deals. As long as you have done your homework and have a reasonable idea of the value of your trade it doesn’t matter whether you negotiate the value of your trade before or after making a deal on the new car. Dealers have less flexibility in the price of the new car than they do with the trade in, so concentrate on getting the very best price on the new vehicle you are purchasing is key. Then, you can focus on the trade.
Overall when making the decision to trade in a vehicle or sell it on your own, be sure to weigh your own pros and cons and consider things like timing of your registration renewal. Do a little homework and think objectively about the value of your car and the time frame you’re working with to have it taken off your hands. Whichever route you decide is best, you’ll be confident in your decision and can focus on enjoying your new car.
Feature image by Todd Lappin